Turkey has concluded a high number of deals this week, with some bookings done at higher price levels. The price gap between ex-EU and ex-US deals has widened, while the price difference for ex-EU HMS I/II 80:20 scrap and higher grades are now standing at $25/mt.
Having procured most of their scrap needs for June shipments, Turkey was still in the market to complete its purchases for this shipment period earlier this week and to even start buying for July shipments. Some market sources believed that Turkey’s import scrap market had hit the bottom and could show some upward correction. However, there was no excitement among market players since few, if any, expect an upward trend in the deep sea scrap market.
Turkey’s import scrap market is once again silent following the deals disclosed late yesterday, May 30. Sources report that the deep sea scrap purchases done yesterday were for late June shipments and no offers for this shipment date are left. There is a rumor of one ex-US cargo offered for this period, but SteelOrbis hears the seller took a step back and is now saying they will have an offer for early July. Since Turkey has not bought a high number of cargoes for shipment in the first half of July, Turkish mills are expected to move to make purchases next week. Their aim will be to secure some of their needs before the Feast of Sacrifice holiday starting on June 16. Some sellers believe the anticipated demand from Turkish mills may cause a slight upward movement in prices, while Turkish mills are resisting this idea citing their lack of steel sales.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.07 percent week on week. The prices are now 2.08 percent lower month on month in the deep sea segment, with prices being in the range of $372-380/mt CFR.
US scrap markets for June are now discussed sideways to $20-40/nt ($22-44/mt) less on the heels of continued flagging domestic finished steel demand, and amid growing expectations for mill cancellations on existing May scrap orders over the next several days, market insiders told SteelOrbis this week.
This week’s even lower scrap call for the June buy-cycle continues the consistently lower trend that saw June scrap discussed at sideways to $10-20/nt ($11-22/mt) lower compared with May scrap settled prices last week, and an even earlier weekly June buy-cycle market call pegging June prices sideways compared to May.
SteelOrbis has learned that the current prices for Mexican domestic shredded scrap have increased by MXN 100/mt ($6/mt) over the past week to MXN 6,550/mt ($381/mt). Additionally, HMS I/II scrap prices have risen by MXN 600/mt ($35/mt) over the same period to MXN 6,550/mt ($381/mt).Link:
Over the past week, local Italian scrap prices have declined by €5-15/mt, thus returning to the levels of a month ago, prior to the last round of increases. According to a steel mill official, “In a normal historical moment, the scrap price would fall consistently. Instead, we only get minor changes because of the shortage of scrap”. To cope with this critical situation and to further cool the local market, many steel mills are importing raw material from the US and South America. Mills will most likely come out with even lower purchase prices at the beginning of June.
Although steel mills are talking about long stops and major production slowdowns between July and August, some traders are more inclined to think that prices will stabilize. One market participant believes that these are mostly threats and mills will continue to work at reduced capacity and therefore will continue to need scrap supplies. Another market participant agreed and added that the scarcity of available scrap will not allow major reductions. One source also mentioned traders have little margin because of high collection prices.
Several sources stated that steel mills in the north of Spain are trying to lower their scrap purchase prices by about €10/mt. According to market participants, however, there are no market conditions for an effective decrease as scrap flows are low. Local scrap prices are therefore expected to remain unchanged in the coming weeks.
The leading Japanese EAF-based steel producer Tokyo Steel has cut its scrap procurement prices for its Tahara and Nagoya plants by JPY 2,000/mt as compared to the levels shared on May 9. The fluctuation of the Japanese yen is still impacting ex-Japan scrap offers and most of the usual buyers in the spot market believe that the current offer levels are on the high side. The fire at the Tahara plant is believed to be the reason Tokyo Steel lowered its prices at the two locations in question. After the announcement, Tokyo Steel’s general range for H2 grade scrap has declined by JPY 2,000/mt on the lower end to JPY 48,500-51,500/mt ($315-328/mt) depending on the mill.
Meanwhile, Tokyo Steel has opened a satellite yard in the Kansai region and announced prices for the new yard. Market sources report that the producer will collect scrap in the Kansai region to ship it to its Okayama plant.
Sentiment in the Taiwanese scrap market has remained negative. Market sources expect scrap prices to continue moving down in the coming period. Offers for ex-US HMS I/II (80:20) scrap in containers have continued their downward movement and are now at $347-353/mt CFR, down by $2-3/mt week on week.
The Vietnamese scrap market has softened slightly over the past week. Japanese sellers report that the impact of the recent accident at Tokyo Steel’s Tahara plant is exerting pressure on domestic scrap prices, as is the lack of demand from abroad. SteelOrbis has learned that Japanese H2 scrap offers to Vietnam have declined by $5/mt on the upper end to $370-375/mt CFR during the past week. Tokyo Bay FAS-based prices for H2 grade scrap have been at JPY 50,000-51,500/mt ($318-327/mt), stable on yen basis. However, due to the fluctuation of the Japanese yen against the US dollar, Tokyo Bay FAS-based prices for H2 grade scrap have decreased by $1/mt on the upper end week on week. This level shows that FOB prices are at JPY 51,000-52,500/mt ($324-334/mt) for this grade.
Trade in Bangladesh’s import scrap market has remained moderate with prices moving in different directions, depending on the material specification and the suppliers. Offers for ex-EU/UK shredded scrap in containers have been reported at $420-425/mt CFR, against $425/mt CFR last week. Meanwhile, offers for HMS I/II 80:20 scrap from Europe and the UK have been heard at $402-405/mt CFR, the same as last week. According to sources, a deal for ex-Canada HMS I/II 90:10 containerized scrap has been signed at $398/mt CFR. Meanwhile, trade has remained silent in the bulk segment, with only talk circulating in the market about a deal for 15,000 mt of ex-Japan H2 scrap signed at $405-410/mt CFR for July-August arrival, though this information has not been confirmed by the time of publication. Indicative offers for ex-US HMS grade scrap in bulk have remained at $402-405/mt CFR, the same as last week.
The price trend in Pakistani import scrap market has been lacking a firm direction since, while most import offers for shredded scrap in containers have been voiced at relatively unchanged levels compared to last week, some market sources have reported sellers’ attempts to go higher. However, new deals have been reported with additional discounts this week. More specifically, according to market sources, most offers for ex-EU/UK shredded scrap in containers have been voiced at $420/mt CFR, relatively unchanged from last week. However, while some foreign suppliers are reported to be offering their materials at above $420/mt CFR, several deals for ex-EU scrap have been signed at $415-417/mt CFR this week.